Econ Jobs, Money, Love

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In some academic disciplines in the humanities and social sciences, graduate programs are just starting to consider the implications of training large number of students for non-academic careers. The tight academic job market has forced the issue.

In economics, many Ph.D.s have for years made their careers outside of academe, working in either government or in the business world. But as a study presented Friday at the annual meeting of the American Economic Association illustrates, there are changes going on in the choices made by those who go into academe or leave it.

The study was based on data from the National Science Foundation’s Survey of Earned Doctorates, and also on surveys of economics Ph.D.s who entered or left programs in certain years. The work was conducted by Wendy Stock, professor of economics at Montana State University, and John Siegfried, professor of economics at Vanderbilt University.

Comparing four cohorts of economics Ph.D.s by year graduated (from 1997 through 2011), the study found that while a majority of those who are employed as economists still enter academe, that share is going down. And while salaries for those in business and industry exceeded those in academe throughout the period studied, the time span saw salaries in government grow such that they too now exceed those in academe. The table below -- which covers those who were employed as economists -- illustrates the financial benefit for those who work outside academe, and that benefit grows over time, as raises are larger outside of academe.

Employment Outcomes for Economics Ph.D.s

Employer

1997

2002

2008

2011

--Academe

63.7%

55.7%

59.3%

56.3%

--Business

13.6%

18.3%

18.1%

16.8%

--Government

8.7%

16.0%

12.5%

14.9%

Business/academe starting salary ratio

1.16

1.15

1.40

1.22

Government/academe starting salary ratio

0.87

1.10

1.27

1.17

Based on survey responses, the paper found, for example, that for those who earned Ph.D.s in 1997, the average annual salary increase was 8.2 percent. But for academics that was 5.7 percent, while for non-academics it was 15.0 percent.

The relatively modest growth in academe (even though, in comparisons by discipline, economics faculty members do well compared to many arts and humanities fields) results in “salary inversion” issues, the study finds.

“Indeed, the median salaries of graduates of full-time permanent 9-10 month academic economists hired in 2002-3 actually exceeded the median 2003 salaries of their counterparts initially hired in 1997-98,” the paper says. “Some, but not all, of this apparent salary inversion reflects a different mix of employers and departments between the two cohorts, with the younger group securing relatively more jobs at higher paying institutions.”

Marriage, the research finds, benefits men and hurts women – if one judges by salary. Men who are married at the time they earn their doctorates see a 15 percent salary boost during the first five years of employment, compared to single men. And men who get married during that period see a 25 percent boost.

The picture is different for women. For them, getting married is associated with a 23 percent penalty in salary growth, compared to single women. The paper speculates that this reflects “compromises incurred in a two-career search.”

The surveys of new Ph.D.s also asked them about the doctoral education they received. Among the findings:

Most said that the overall emphasis in their programs was “about right.”

Most also reported too little emphasis on “applying economic theory to real-world problems,” “understanding economic institutions and history” and “the history of economic ideas.”

Mathematics was viewed by most as more important in graduate school than in their careers.

Skills in application, instruction and communication were more important in their careers than in graduate school.